The 15-minute long grisly video shows the horrific beheading a group of Syrian military prisoners and then the decapitated head of Mr Kassig at the feet of a masked man.

The man, who appears to be the same militant known as Jihadi John who has appeared in other beheading videos, says: "This is Peter Edward Kassig, a US citizen."

He also denounces David Cameron as a puppet of the United States president:

He says: “To Obama, the dog of Rome. Today we are slaughtering the soldiers of Bashar and tomorrow we will be slaughtering your soldiers and with Allah’s permission we will break this final and last crusade and the Islamic State will soon, like your puppet David Cameron said, begin to slaughter your people on your streets.”

Mr Kassig's death would be the fifth beheading of a Westerner apparently carried out by violent extremists of Isil.

Ed and Paula Kassig, parents of Peter Kassig, who changed his name in captivity to Abdul-Rahman, said:

“We are aware of the news reports being circulated about our treasured son and are waiting for confirmation from the government as to the authenticity of these reports. We will have no other statement at this time and ask that you please respect our privacy.

“The family respectfully asks that the news media avoid playing into the hostage takers’ hands and refrain from publishing or broadcasting photographs or video distributed by the hostage takers.

"We prefer our son is written about and remembered for his important work and the love he shared with friends and family, not in the manner the hostage takers would use to manipulate Americans and further their cause.”

Ed and Paula Kassig, from Indianapolis, issued their own video message describing how their son had converted to Islam – taking the name Abdul Rahman Kassig – and that other captives had told them his faith brought him comfort.

Mrs Kassig said: “Our hearts ache for you to be granted your freedom so that we can hug you again and then set you free to continue the life you have chosen, the life of service to those in gravest [need].”

They also set up a Twitter account to send messages to his captors.

"I am an old woman, and Abdul Rahman is my only child. My husband and I are on our own, with no help from the government," wrote Mrs Kassig. "We would like to talk to you. How can we reach you?"

Their campaign included releasing a letter sent by their son, describing his terrifying ordeal.

“I am obviously pretty scared to die but the hardest part is not knowing, wondering, hoping, and wondering if I should even hope at all,” he wrote. “If I do die, I figure that at least you and I can seek refuge and comfort in knowing that I went out as a result of trying to alleviate suffering and helping those in need.”

They also joined worshippers at a mosque in the to pray for his release.

Mr Kassig's death would be the latest murder following two American journalists – James Foley, Steven Sotloff – and two British aid workers – David Haines and Mr Henning. A third Briton, John Cantlie, an award-winning photographer is still being held.

His skills have been used by Isil to deliver a string of propaganda messages.

Analysts suspect the gruesome nature of the beheadings and their accompanying videos are part of a complex media campaign designed to breed revulsion in the West and draw the US and its allies deeper into conflict.

The 16-minute long video also charts Isil's rise to its position as a dominant player among international jihadist groups.

At one point, a map flashes on the screen, showing the location of Islamic State affiliates across the Middle East, including Egypt's restive Sinai peninsula, Algeria, Yemen and Libya.

"The era of division has passed," says the narrator, calling on other groups to pledge allegiance to their case.